NYX Nyse Euronext

The proposed merger of NYSE Euronext (NYX) and Deutsche Boerse (DBOEF, DB1.XE) is the latest chapter in the iconic trading floor's evolution to stay competitive in global markets, executives involved in the merger told lawmakers Monday.

"Our proposed merger is simply a continued reflection of how we must adapt and change in order to remain a leader among exchanges, a fierce competitor that services the needs of its clients and an advocate for transparency and fair play," NYSE Euronext Chief Operating Officer Larry Leibowitz said in a congressional hearing.

Without "diversifying and globalizing," NYSE would be "doomed to become a charming but irrelevant anachronism," Leibowitz said.

Lawmakers must "ask whether this combination will threaten the robust competition in securities exchange markets that has reduced trading costs over the past two decades," said Rep. Bob Goodlatte (R., Va.), chairman of the House Judiciary subcommittee holding the hearing.

Leibowitz said the merger wouldn't threaten the competition that has brought down transaction prices in the U.S. He also reassured lawmakers that the name and headquarters of the NYSE wouldn't change.

Gary Katz, the chief executive of Deutsche Boerse subsidiary International Securities Exchange, said that would strengthen New York as an international financial center.

"The combination of Deutsche Boerse and NYSE Euronext offers unique short and long-term benefits for all of our constituencies: shareholders, employees, regulators, and, importantly, our customers, the retail and institutional investors," Katz said.

Rep. John Conyers Jr. (D., Mich.), the ranking member of the full committee, said he thought the two companies could compete better separately than together.

Katz said he didn't believe the merger would affect the level of competition in the U.S. or globally. He said that different exchanges "compete with themselves" even if they're part of the same parent company.

Lawmakers also pressed the exchange executives about whether the proposed merger would prompt them to lay off U.S. workers. Leibowitz said because the companies overlap more in Europe, there would more likely be more job losses overseas than in the United States. However, creating a venue that spurs more initial public offerings could also stimulate job growth, he said.

"When companies go public they create more jobs than at any other point in their life cycle," Leibowitz said. "That's how they get the currency to hire more people, to grow."

The merger has to be approved by the Justice Department and U.S. regulators as well as European regulators. Leibowitz said that the merger requires 47 different regulators to sign off on it, joking that they might set a record.

-By Jamila Trindle, Dow Jones Newswires; 202-862-6684; jamila.trindle@dowjones.com

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